Inflation in Venezuela is about to reach 150 thousand percent

11/13/2018

Efforts of the President of the Bolivarian Republic to curb price increases are clearly failing.

Voice of America

The staggering growth of prices is also observed after the government of the Bolivarian Republic held a denomination, issuing a new currency, the "sovereign Bolivar". Its cost is 100 thousand "old" Bolivars. The new currency was supposed to normalize daily transactions and help the country's authorities in the fight against hyperinflation. The sovereign Bolivar was tied to Petro, a digital currency issued by the Venezuelan government. In turn, its value depends on the price of oil, which is produced in the country.

Initially, the move seemed to be successful: the sovereign Bolivar kept in the range from 95 to 115 per US dollar, however, according to Monitor Dolar, on November 12, the bolivar was already trading at 276.53 per dollar.

Venezuela is a country with the largest oil reserves, which, however, is going through both a financial and a humanitarian crisis. The Bolivarian Republic is facing a shortage of food, medicine and other basic goods.

In addition, the Trump administration imposed sanctions against dozens of Venezuelans affiliated with the Maduro regime, including his wife, Cilia Flores. The US Treasury also arrested a private plane worth $ 20 million, owned by Diosdado Cabello, vice-chairman of the Venezuelan Socialist Party.

The projections for rising inflation in Venezuela are disappointing: as early as June, the IMF said that by the end of 2018, the figure would reach 1 million percent, noting that the country had "entered a deep economic and social crisis."